LONDON, March 5: Gold steadied on Wednesday after trimming gains as the dollar gained ground against the euro, but analysts said the long-term bull trend remained intact and the metal still had $1,000 an ounce in its sights.
Spot gold rose as high as $968.50 an ounce on bargain hunting before falling to $963.10/963.80 against $963.20/964.00 in New York late on Tuesday, when it fell nearly 2 per cent with a decline in oil prices.
Though gold remained below Monday’s record high of $989.30, analysts said it was still on track to hit $1,000, with oil prices hovering near an all-time high and the dollar’s appeal declining on expectations of more US rate cuts.
The next move in gold really depends on what happens to the
A weaker dollar makes gold cheaper for holders of other currencies and often lifts bullion demand. The metal is also generally seen as a hedge against oil-led inflation.
Oil steadied above $100 a barrel as Opec ministers indicated they were likely to keep output unchanged despite US calls for action to cut prices. It hit a record high of $103.95 on Monday.
Short-term though, gold is still vulnerable to profit taking, said James Moore, metals analyst at TheBullionDesk.com.
Bargain-hunting support has been found this morning and given the still negative outlook for both the US economy and the greenback, it does seem inevitable that gold will challenge $1,000 in the near future.
In the physical sector, gold’s fall from record highs spurred buying by jewellers in Asia, while the marriage season in India, the world’s largest bullion consumer, helped the local market.
US gold futures for April delivery was down $1.1 at $965.30 an ounce, off a record high of $992.00 on Monday.
Platinum rose as high as $2,239 before falling to $2,191/2,201 an ounce, against $2,220/2,230 late on Tuesday, when it hit a record of $2,290 on persistent supply fears after a power crisis disrupted mining in top producer South Africa.
Ongoing supply issues and potential for further mine disruption in South Africa means that platinum prices could see some immunity to more general market weakness, Fairfax investment bank said in a daily market note.
Palladium fell to $536/546 an ounce from $545/550, having reached a 6-1/2-year high of $590 on Tuesday. Silver edged down to $19.60/19.65 an ounce from $19.71/19.76 -- off Monday’s 27-year high at $20.60 an ounce.—Reuters
